The strong double-digit growth in both revenue and EBITDAR at Parkway’s international operations, as well as healthcare services segments, helped mitigate the 9%/14% YoY decline at its Singapore hospitals, on 4% YoY lower inpatient admissions, even as day cases continued to rise, by 9% YoY.
With curative services more resilient to macro uncertainties, we see Parkway’s 32 fixed-fee surgical packages (launched in March 2009), coupled with increase in Medisave withdrawal limits gaining traction among the local patient pool, which could partly offset the decline in foreign patient volumes.
We have kept our earnings forecasts intact for now, and assume that Parkway would likely launch the sale of its Novena hospital medical suites in FY10E. Our SOTP-based target price is S$2.85. We maintain our OUTPERFORM rating.
We noted that investors have become more forward-looking, with heightened expectations. We believe this was due to Parkway's recent good quarterly earnings as well as investors' greater optimism on the group's business model. We have raised our FY09 EPS estimate by 6% to factor in stronger occupancy rates and higher admissions in Malaysia. On the other hand, we have cut FY10-11 forecasts by 7-14% as we scale down on revenue per patient day assumptions for Singapore hospitals. Our sum-of-the-parts target price drops to S$2.00 from S$2.30. Nevertheless, we continue to like Parkway for its strong regional franchise and initiatives to broaden its healthcare revenue base locally and internationally. Maintain Outperform.
Sponsored Links
No comments:
Post a Comment